2024 is here, ready or not. The past year has been a blur and an amalgam of bad news mixed like a cocktail, with a bit of sunshine glimmering through looming dark clouds over the horizon every now and then. And, like the start of any new year, we reflect and muse over what 2024 might have in store for us.

First, there are the geopolitical tensions between the behemoths — US, Russia and China — cheered on avidly by their wannabee mini-clones — North Korea and Iran — which continue to pose a threat like a Sword of Damocles over mankind in the fearful possibility that a nuclear war could ensue should an irrational misguided hothead take control of the levers. The saber-rattling noise coming out of North Korea's Kim Jung Un is particularly worrisome for us in the region.

In the ongoing Ukraine-Russia standoff, will the world finally see a closure? The cost on both sides has been staggering. The US and its NATO allies have been pouring billions, about $75 billion as of October 2023, from the US alone, representing 0.32 percent of GDP. Russia, based on US non-profit think tank RAND Corporation's estimates, has racked up approximately $40 billion through August 2022, or about 2.2 percent of their 2021 GDP.

Which side has the deeper pocket? An election year in the US, Republicans have been unhappy about the expenses so far, and an early or prolonged resolution could very well be a make-or-break political game changer for Joe Biden, potentially propelling Donald Trump back to the White House. It is a different story, however, for Russia's leadership, given Vladimir Putin's stranglehold over the Kremlin unless an unforeseen political crisis occurs, say, an assassination because of continued social unrest.

Remember, Czar Nicholas II was kicked out because of Russia's defeat in World War 1. RAND, however, believes Russia has the economic sustaining power to continue the war for several years since, after all, it is the third largest crude oil producer in the world after the US and Saudi Arabia. I believe Putin has no choice but to tough it out. It is a matter of his survival, literally. The situation in the US, however, is more volatile, politically. Who knows what Trump will do about more aid to Ukraine if he wins. Given all these moving pieces, I guess that the war will not have a closure in 2024, unfortunately for the world.

On the economic front, it seems a foregone conclusion that inflation is definitely waning and interest rates will start easing unless another Black Swan like Covid surfaces and surprises the world. It is now only a question of which quarter the Fed will drop the rates. The consensus seems to be pointing to mid-year. Local equities logically should also start perking up by then. I think our market is terribly oversold. As of the end of December 2023, our price-to-earnings ratio is at 12.8x compared to our historic high of 28.2x in January 1997. For the traders out there, it might be good to start making small bets on blue chips like BPI, my personal favorite since I am a proud BPI alumnus, as of 12/29/23, closing of P103.80 vs. a high of P118.0 as of 07/25/23. That's a potential upside of about 14 percent. However, for the risk-averse folks, positioning your excess liquidity now in long-dated fixed-income securities is the better bet, I believe. BVAL 364 days yields averaging 5.8 percent as of 12/29/23, before some likely capital gains as rates decrease.